FEATURED COMPANIES

In 2008, the UK market for international freight services was worth an estimated £20.04bn. Of this, £15.98bn was attributable to freight forwarding and related services (including storage, warehousing and cargo-handling activities) — a 4.4% increase over the previous year.

As well as freight forwarding, the international freight services sector includes the freight operations of the UK's rail, road, sea and air transport companies. Of these, the rail sector showed the largest percentage increase in turnover between 2007 and 2008. However, rail has a very small share of the market and this relatively high growth rate was in the context of recovery from a year of poor performance, following a decade of stagnation. Sea transport was the best-performing of the main modes of transport.

Among the recent developments in the industry has been a blurring of the boundaries between freight forwarders, warehouse operators, express carriers and third-party logistics providers, which were once considered to operate in separate sectors. Many large groups have expanded their operations beyond their traditional base in order to offer customers a `one-stop shop' for a range
of transport and logistics services on a global basis. This trend is illustrated by the recent history of Deutsche Post World Net — a group that now includes forwarding, contract logistics, express carriage, warehouse operations and storage among its activities. Another significant development has been the increase in foreign-registered road vehicles traveling to the European continent from the UK, to the extent that their share is now much greater than that of UK-registered vehicles.

The future of the international freight services sector as a whole, and the freight-forwarding sector in particular, is overshadowed by the prospects for recovery from the world recession and the timing of such a recovery. This recession has had a greater impact on world trade, and hence on the sector, than had been anticipated until recently, and there is unlikely to be a rapid recovery to the levels of activity seen in 2008.

However, it seems unlikely that the current world recession will lead to a reversal of the long-term trend towards increasing globalization, whilst the future expansion of the EU (likely to proceed, although not on the scale of the recent accession of new members in 2004 and 2007) is not expected to have a significant impact on the market during the forecast period to 2013. Other issues that are likely to affect the sector over this period include the need to control the level of `greenhouse gas' emissions attributable to transport operations, the development of IT applications in support of freight transport (such as the International Air Transport Association's [IATA] e-freight project), and the probability of further industry consolidation.
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